Royal Oak may get less revenue from Arts, Beats & Eats

Who ever thought a less than half-acre chunk of Royal Oak property could cause so much trouble?

An alleged dispute over a piece of Royal Oak land has caused a ripple effect in the city after a local college decided to keep the revenue from two of its parking structures for the Arts, Beats & Eats festival.

“Over three years, the city and the downtown development authority has made a little bit, but everything’s been covered by parking,” said Donald Johnson, Royal Oak’s city manager. “All the places where the city’s involved in parking, the money people pay is also paying for all the police, fire, emergency medical services and more.”

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Johnson said the dispute seems to have begun after city officials temporarily rejected the sale of a 16,605-square-foot parcel of city land — located at Main and Seventh streets — to Oakland Community College’s Royal Oak campus. That’s when the college decided it would not allow the money to go to the city, he explained.

However, OCC officials say that while the school was expecting a deal for the property to go through, their choice to take money from the school’s parking structures was strictly an opportunity to provide more scholarships. OCC, which had allowed Royal Oak to take revenue from its parking garages since 2010 when the festival moved to the city, had actually taken a loss after accruing costs for the operational side of structures during the festival, said school administration.

The disputed land, which has temporarily been converted into a parking lot, sits just south of another parcel — at the southeast corner of Washington and Lincoln streets — that Royal Oak has been in talks to develop a hotel on.

“We’re in the talking stages,” said Johnson. “They haven’t submitted an application to plan anything yet ... (there are) some drawings prepared. ... But they are only interested in the (north) site.”

If the city eventually develops a hotel on the Washington site, its leaders wouldn’t have much of an issue selling the land OCC wanted, Johnson explained. The college’s administrators didn’t want to wait to acquire the parcel, however, so they countered with their own move, he added.

“OCC (administrators) decided that they needed to retaliate in the way of saying that the city wouldn’t be able to use two parking structures for Arts, Beats & Eats for city parking revenue,” said Johnson of the communication breakdown.

That’s not how Janet Roberts, OCC’s marketing and communications director, said she sees it.

“We don’t want to combine the two issues,” Roberts said. “In our minds, the parking structure is totally separate from the property.”

Roberts said the school has been looking to purchase that small parcel for years. She noted that school administrators believed that the two parties were going to make a deal.

Even with the previous interest, the most recent prospective property sale has been the catalyst for conversations alleging communication between the college and the city are at a halt and that the former Pontiac-based art festival could suffer without parking revenue.

According to Johnson, it’s partly true.

“We’ve had an agreement with them for the last three years,” since the festival has moved south to Royal Oak, Johnson said. “We paid them 25 percent of the revenue brought in from the parking structures. ... Last year, we came close to $93,000 total net revenue for the festival — the structures pulled in a net of about $70,000, so the city’s net was around $50,000.”

OCC’s Roberts said that while the school previously had a standing agreement with the city, the reason for the change was because “the board felt it was an opportunity for us to give back to the students (and) do more with our scholarship foundation.

“We give out a few hundred scholarships a year, so that would help fund more opportunities for our students.”

With the new arrangement, Roberts said, OCC would make the parking structures available “as we have in the past, but instead will make the money of use for scholarships.”

The Oakland Press attempted to reach OCC Royal Oak campus director Steve Reese for comment, but Roberts said, “If Royal Oak is seeing this as a dispute or controversy, Steve would rather be at arm’s length.”

Royal Oak has required OCC to submit a permit application and supply architectural drawings of the parking garages if it wants to use the structures in the festival. The city had never done that before, Roberts said. OCC applied, but its initial permit was denied because the drawings weren’t included.

“We have (since) supplied them and reapplied, but have not heard back yet,” Robertssaid.

Meanwhile, Arts, Beats and Eats’ producer Jon Witz said his festival has been caught in the middle and he doesn’t know why. He said the money that goes to the city from parking finances the safety of the festival.

“It’s certainly in the best interest of the festival to see the revenue from parking — revenue that comes from the guests that attend — support the city of Royal Oak and the people that make this event happen,” meaning police and fire services, Witz said. “It’s unfortunate that we have to get caught in the middle of this dispute.”

Commissioner wants free policing

As a contract for Oakland County Sheriff’s deputies to patrol the Royal Oak festival passed through the Board of Commissioners committee process last week, one commissioner said the sheriff’s patrols should be free.

The contract will allow Oakland County Sheriff’s deputies to work on an overtime basis at the upcoming festival, along with other special events in the city. It will begin on Aug. 1 and end Dec. 31. An overtime hourly patrol rate for a lieutenant — the highest ranking officer that would be at the festival — would be a little more than $88 an hour, according to the contract.

Democrat Dave Woodward, of Royal Oak, noted that one change in weather could bring a windfall of debt onto the city’s taxpayers. He voted against the contract.

“I want this event to be successful, I don’t want the taxpayers of Royal Oak to have to disproportionally bear the burden for keeping the community safe,” Woodward said. “If you get a big rain storm that goes through and people just don’t show up, your revenue’s down everywhere ... and you’re still on the hook because you have these officers activated for the event because, well, what if all these people do show up?”

He said with the projected lost revenue of between $25,000 and $50,000 from the OCC-Royal Oak parking dispute, that could mean serious losses and “increased economic pressures.”

“The sheriff should be providing for Arts, Beats and Eats, especially since we highlight it on the county budget under the heading ‘quality of life,’” Woodward said. He added that the Woodward Dream Cruise is offered deputies for free.

Six deputies will be provided by the sheriff’s office for each day of the festival.

Festival history

Arts, Beats and Eats had its beginnings in Pontiac and provided a unique urban atmosphere that many didn’t usually come downtown to see. The festival stayed in Pontiac for 13 years, attracting thousands to downtown businesses and affording the area with a surge of revenue.

In 2010, festival producer Witz took the festival southeast, to downtown Royal Oak.

Witz said the years in Pontiac were good, but he felt the festival had to move.

“The citizens, residents and downtown businesses of Pontiac were incredible hosts for years,” said Witz, the longtime producer of Arts, Beats & Eats. Downtown was safe and vibrant, with the Phoenix Center available for concerts.

“We were not looking to move the festival. We simply did not have an agreement. It was a reflection of the vision or lack thereof of city leaders.”

The announcement that the Arts, Beats and Eats festival will move from Pontiac to Royal Oak next year did not bode well for business owners in downtown Pontiac, but officials in 2009 dreamt of a new festival finding its way into the city.

“Hopefully, we’ll be bigger and better than what Jon (Witz) provided for us,” with Arts, Beats and Eats, said Fred Leeb, Pontiac’s then-emergency financial manager. “We have a huge venue with the Phoenix Center and my intent is to find a promoter to take on that venue and have a new festival.”

Leeb said the financing of the festival — Witz wanted Pontiac to sign on for another six years at $600,000 — was the crux of the problem between Pontiac and festival organizers.

In 2010, the Royal Oak DDA put up $100,000 for the Arts, Beats and Eats festival. The city’s original plan was to recoup money from parking fees.

Current Royal Oak City Manager Johnson said that the first year of the festival’s stay in the city, a slight profit was garnered. The second year, the DDA lost about $9,000, but last year it gained it back.

With such flat changes in revenue, he said, “The weather could potentially make a huge difference ... if we have last year’s numbers, we’ll still make money, but if we have year two’s numbers, it’ll be a different story.”

Festival officials announced June 11 that on top of an extended partnership with Royal Oak to host the festival through 2017, and steady admission and parking fees throughout the contract, festivalgoers will be able to download a new mobile application to enhance their experience.

The application will be available for download from the Apple App Store and via Google Play starting in early August and is part of an initiative to help the festival keep up with the growing technological focus of Oakland County’s development.